Phillips 66 recently announced its plans to shut down a Los Angeles-area refinery by the end of 2025 due to market concerns. This refinery accounts for approximately 8% of California’s refining capacity and has been in operation for over a century. CEO Mark Lashier stated that the long-term sustainability of the refinery is uncertain, and the company is exploring future uses for its strategically located properties near the Port of Los Angeles. Despite the closure of this refinery, Phillips 66 intends to continue operating in California and meeting the demands of its commercial and customer base. The closure will impact 600 employees and 300 contractors who help operate the facility.
The decision to close the Los Angeles-area refinery comes shortly after Governor Gavin Newsom signed a law aimed at preventing spikes in gas prices. This legislation enables energy regulators to mandate that refineries maintain a certain level of fuel reserves to prevent sudden price increases when refineries go offline for maintenance. Phillips 66 has expressed support for the state’s efforts to ensure that fuel levels meet consumer needs. The company also operates a refinery near San Francisco that accounts for about 5% of California’s refining capacity. Additionally, the Phillips 66 Santa Maria refinery located near Santa Barbara shut down in 2023 as part of the company’s plans to convert its San Francisco-area site into one of the world’s largest renewable fuels facilities.
Governor Newsom has been advocating for stricter regulations on oil and gas companies in California. In 2022, he called a special legislative session to pass laws targeting oil companies for excessive profits. Newsom frequently highlights California’s role as a climate leader and has implemented policies to phase out the sale of new fossil fuel-powered lawn mowers, cars, big rigs, and trains. The state’s commitment to environmental sustainability aligns with efforts to reduce greenhouse gas emissions and transition to renewable energy sources. These initiatives are intended to combat climate change and promote a cleaner, more sustainable future for California.
The closure of the Los Angeles-area refinery will have significant implications for the energy landscape in California. It underscores the changing dynamics of the market and the shift towards renewable energy sources. Phillips 66’s decision to close this facility reflects the company’s strategic assessment of its operations amid evolving industry trends and regulatory requirements. While the refinery’s closure will impact hundreds of employees and contractors, Phillips 66 is committed to working with leading land development firms to explore alternative uses for its properties in the Los Angeles area. The company remains dedicated to serving California and adapting to meet the changing demands of the market.
In light of the refinery closure and ongoing efforts to reduce greenhouse gas emissions, California’s energy sector is likely to undergo further transformations in the coming years. Governor Newsom’s initiatives to curb gas price spikes and regulate oil and gas companies demonstrate the state’s commitment to environmental stewardship and climate action. By transitioning towards renewable fuels and phasing out fossil fuel-powered vehicles and equipment, California aims to reduce its carbon footprint and promote sustainable energy practices. These policy measures align with broader efforts to combat climate change on both a state and national level, setting a precedent for other regions to follow in the transition to a greener economy.
